Barfoot & Thompson is fighting the claim, alleging OLA is either solely responsible for or, at a minimum, contributed to its losses.
It claimed OLA’s then director gave the agent permission to copy-paste her own initials and that the builder was an “experienced property developer” which understood the legal risks of property sales.
OLA’s claim further alleged the agent ignored both Real Estate Authority (REA) and Barfoot & Thompson’s internal guidelines for valid electronic signing.
“The copying and pasting of signatures was done to make the contract appear uniform and avoid scrutiny by lawyers,” the claim alleged the Barfoot & Thompson agent admitted during the previous trial in June.
Barfoot & Thompson accepted its agent told a court he’d made a mistake, but argued there was no “legal requirement” to follow its or the REA’s electronic signature guides.
Last year’s district court case served as a reminder for all Kiwis completing electronic property transactions about what counts as a valid digital signature.
Judge Kate Davenport, KC, ruled that while copy-pasting signatures could be legally valid, it is only enforceable if the method is “exclusively linked” to the person signing and if the action is under their direct control.
Now the upcoming High Court battle could help settle who is financially responsible when digital signatures go wrong.
Signed but not sealed
The Mt Wellington townhouse in Barrack Rd first went on sale in 2022 as one of several units being built and sold by OLA.
The sale in question involved two Barfoot & Thompson agents on opposite sides of the deal – former “rising star” Prince Kapoor acting for the seller and colleague Huong Tuyet Tieu buying in her own right.
Tieu offered $1.12m for the home via a Barfoot & Thompson internal system using DocuSign in March 2022.
OLA counter-offered at $1.15m – which under contract law automatically cancelled the original offer and became the current deal under consideration.
Kapoor did not advise OLA that the counter-offer cancelled the original offer.
When OLA’s director later agreed to sell at $1.12m, Kapoor treated it as a done deal and did not get Tieu’s fresh acceptance of the original price as was necessary because the first offer had been cancelled.
OLA alleged Kapoor also added a new clause and copy-pasted Tieu’s DocuSign initials onto it using an iPad app called Notability rather than getting a fresh signature.
Kapoor claimed Tieu knew he was copying the signatures, but Tieu denied that.
Tieu paid a $56,000 deposit but later refused to pay the rest of the purchase price and never settled.
The judge ruled last August that no valid contract had ever been formed.
The $600,000 lawsuit
After failing to sue the buyer, OLA instead sought to take Barfoot & Thompson to court for $600,359.96 in damages, alleging 11 points of negligence, breach of the Fair Trading Act, and breach of fiduciary duty.
They included using unreliable signatures, failing to advise OLA about the counter-offer, and prioritising “the securing of its commission over the enforceability” of the contract.
OLA alleged Kapoor did not disclose the copy-paste method until he was cross-examined during last year’s district court trial.
That allegedly caused the developer to pursue a “doomed” case because it had not known about Kapoor’s actions.
OLA said the fallout cost the company $245,000 on the resale, $205,000 in legal fees from the failed case against Tieu, and $66,078 in adverse costs.
Barfoot & Thompson denied the claims.
Its defence argued the real reason the deal collapsed was that Tieu simply did not have the money to settle.
It cited a text exchange from around the time settlement was due.
In it, Kapoor texted Tieu: “u wanna lend me some money for two months on interest?”.
Tieu replied: “I can’t even settle mine. How do I have money lend u?? u shld lend me instead”.
The agency also argued OLA contributed to its own losses by choosing to sue Tieu and by reselling the property at an “undervalue”.
OLA Homes declined to comment.
Barfoot & Thompson and its former agent Kapoor were approached for comment.
A Barfoot spokesperson said: “This matter is currently before the courts, and we are reluctant to provide detailed commentary while proceedings are ongoing.
“The circumstances involved are more complex than can be reflected through responses to a limited set of questions, and it is important that the issues are considered in full through the proper legal process.
“Given the ongoing proceedings, it would not be appropriate to comment further at this stage.”